Too Big to Fail - Andrew Ross Sorkin [306]
Tickets as much as $3,250: Hugo Lindgren, “The Confidence Man,” New York, June 23, 2008.
Tomorrow’s Children Fund: Ira W. Sohn conference proceeds go to this fund, which helps children with serious blood disorders and cancer (Sohn, a trader, died of cancer at twenty-nine). See http://www.atcfkid.com/.
“We start by asking why a security is likely to be misvalued in the market:” Einhorn, Fooling Some of the People All of the Time, 14.
“The Nonrecurring Room”: Jesse Eisinger, “Diary of a Short-Seller,” Condé Nast Portfolio, May 12, 2008.
had announced that it was stopping investors: At 2:30 a.m. on August 9, Dow Jones posted a press release from BNP Paribas: “The complete evaporation of liquidity in certain market segments of the US securitisation [sic] market has made it impossible to value certain assets fairly regardless of their quality or credit rating. The situation is such that it is no longer possible to value fairly the underlying US ABS assets in the three above-mentioned funds. We are therefore unable to calculate a reliable net asset value (“NAV”) for the funds. See BNP Paribas Unit to Suspend NAV Calculation of Some Funds, Dow Jones, August 9, 2007.
code-named “The Credit Basket”: Lindgren, “The Confidence Man,” New York.
“It is early, and we don’t give guidance on future periods”: Chris O’Meara, Lehman’s Chief Financial Officer, from the “Q3 2007 Lehman Brothers Holdings Inc. Earnings Conference Call,” September 18, 2007.
“This is crazy accounting”: Lindgren, “The Confidence Man,” New York.
“Lehman is not that materially different from Bear Stearns”: David Einhorn, “Private Profits and Socialized Risk,” Grant’s Spring Investment Conference, April 8, 2008.
“I can only feel that you set me up”: Einhorn’s exchange with Callan reported by Susanne Craig, “Finance Chief Is Demoted,” Wall Street Journal, June 13, 2008.
“This is classic value”: “Stock Picks from Sohn Investment Conference,” Reuters, May 23, 2008.
shares of Allied plunged nearly 11 percent: Stephen Taub, “Speaking Candidly,” Alpha, May 2005.
the Securities and Exchange Commission started investigating him: Lindgren, “The Confidence Man, New York.
“One of the key issues I raised about Allied”: This and all succeeding speech quotes by David Einhorn of Greenlight Capital are from his “Accounting Ingenuity” speech at the Ira W. Sohn Investment Research Conference, May 21, 2008.
CHAPTER SIX
“Who talked?”: Susanne Craig, “Lehman Struggles to Shore Up Confidence,” Wall Street Journal, September 11, 2008.
“Lehman Is Seeking Overseas Capital”: Susanne Craig, “Lehman Is Seeking Overseas Capital—As Its Stock Declines, Wall Street Firm Expands Search for Cash, May Tap Korea,” Wall Street Journal, June 4, 2008.
it had tapped the Federal Reserve’s discount window: Lehman emphatically denied the rumors on June 3, 2008, referencing its previous quarter, which had ended with more than $40 billion of liquidity. Joe Bel Bruno, “Lehman Brothers Treasurer: Firm Did Not Tap Fed Discount Window to Avert Cash Problems,” Associated Press, June 3, 2008.
stock was plummeting anyway: Ibid. Lehman’s shares fell 15 percent in the afternoon of Tuesday, June 3, after Lehman liquidity rumors surfaced.
“Lehman’s straight shooter”: Susanne Craig, “Lehman’s Straight Shooter,” Wall Street Journal, May 17, 2008.
“Wall Street’s Most Powerful Woman”: Jesse Eisinger, “Diary of a Short-Seller,” Condé Nast Portfolio, April 2008.
Lehman’s deal with Woori: Hae Won Choi, “Woori Sets Pact with Lehman to Cut Bad Debt,” Asian Wall Street Journal, September 6, 2002; Donald Kirk, “No Pause for Woori,” Institutional Investor, July 1, 2002.
having judged his credentials as inadequate, had tried unsuccessfully to stop it: In June 2008, instead of settling in to his new